Bundesbank to reject Irish bonds

Bank bonds guaranteed by the Government will no longer be accepted as collateral by Germany’s Central Bank — in a move which is certain to make it harder for the National Treasury Management Agency to re-enter bond markets.

The European Central Bank gave all of the eurozone’s 17 national central banks permission not to accept bank bonds underwritten by governments in EU/IMF bailout programmes — Ireland, Portugal and Greece — as collateral to get unlimited ultra-cheap loans.

The Deutsche Bundesbank has confirmed it is the first European central bank to avail of the change of rules starting with €500m already on its balance sheet, a spokeswoman said.